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Written by Denny Ceizyk | Edited by Kurt Adams | Updated June 20, 2023

Current 30 year-fixed mortgage rates are averaging 7.08%

The average rate for a 15-year fixed mortgage is 6.38%

Current average rates are calculated using all conditional loan offers presented to consumers nationwide by LendingTree’s network partners on the previous day for each combination of loan program, loan term and loan amount. Rates and other loan terms are subject to lender approval and not guaranteed.  Not all consumers may qualify.  See LendingTree’s Terms of Use for more details.

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Will mortgage rates go down?

After spiking above 7% in November of 2022, mortgage rates settled slightly lower for first several months of 2023, remaining in the mid-6% range. However, the current mortgage rates forecast indicates that we may soon see some volatility due to concern about the U.S. reaching (and potentially breaching) the debt ceiling. If the government reaches default, rates could rise dramatically — even into the double-digits.

Questions about the debt ceiling aside, mortgage rates usually change week-to-week and month-to-month, and we continue to face economic pressures ranging from inflation to potential rate hikes by the Federal Reserve. Freddie Mac publishes the weekly Primary Market Mortgage Survey (PMMS) and is forecasting rates will drop to 6.2% by the end of 2023. That may give homeowners stuck with 7%+ rates at the peak a glimmer of hope of refinancing to a lower rate.

How does the Federal Reserve impact mortgage rates?

The Federal Reserve’s monetary policy directly affects adjustable-rate mortgages, as they are tied to an index that moves up and down with the broader economy. The Fed’s policy indirectly impacts fixed-rate mortgages, which typically correlate with the 10-year U.S. Treasury bond yield.

How are mortgage rates determined?

There are nine primary factors that determine your mortgage rate:

  1. Your credit score. The higher your score, the lower your rate.
  2. Your down payment amount. Lenders may offer lower rates with a higher down payment.
  3. Your loan amount. You may get a better rate for a higher loan amount.
  4. Your loan program. Interest rates on government-backed refinance programs offered by the FHA and VA tend to be lower than conventional loan rates.
  5. Your loan term. Shorter terms usually equal lower rates.
  6. Your location. Interest rates vary based on where you live.
  7. Your occupancy. You’ll get the best rates financing a home you plan to live in as your primary residence. ⚠ If you’re thinking of buying or refinancing a rental home there’s good news: The upcoming rate changes reduce the adjustments for investment property mortgage rates, which could save you money and help increase your rental income cashflow.
  8. Your property type. Lenders offer the most favorable rates for single-family homes. You’ll pay a higher interest rate for a mortgage on a condo, manufactured home or two- to four-unit (multifamily) home. ⚠ That said, conventional loan pricing for multifamily homes will be cheaper, which could leave more rental income in your pocket each month.
  9. Economic factors. Inflation, the Federal Reserve’s monetary policy and U.S. Treasury bond yields can influence whether mortgage rates go up or down.

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How to get the lowest mortgage rates

⚠ Getting a conventional cash-out refinance may be more expensive in 2023. The Federal Housing Finance Agency (FHFA) announced additional pricing adjustments for factors ranging from credit scores to the type of property you’re buying. The changes don’t go into effect until May 1, but many lenders have begun implementing them.  Look for the ⚠ sign below for more information about the changes and how they might affect the mortgage rate you’re quoted. 

There are seven steps you can take to get your lowest rate:

1. Boost your credit score to 780 or higher.

⚠ The previous “best” conventional loan credit score benchmark of 740 has been replaced by this new higher standard under the upcoming pricing changes. Keep your credit balances low and pay everything on time. Take on a side hustle to pay off debt faster.

2. Make a bigger down payment or borrow less equity.

⚠ You’ll snag the best rate if you have a 780 credit score and a 25% down payment for a conventional loan. However, there is some good news for lower-credit-score borrowers: If your loan-to-value (LTV) ratio — which is a measure of how much of your home’s price you borrow — is 70% to 80% and your credit scores are between 620 and 700, you may get a better rate when the new changes kick in. Cash-out refinance rates will be much more expensive, so only borrow what you need to avoid a big mark up to your interest rate.

3. Reduce your total monthly debt load.

⚠ Lenders measure your debt-to-income (DTI) ratio by dividing your total monthly debt, including your mortgage payment by your before-tax income, and generally prefer a DTI ratio of 43% of less. Some bad news: The Fannie Mae and Freddie Mac changes may assess an extra charge if your DTI ratio exceeds 40%. The silver lining: The change has been delayed until August 1, so you have some time to clear out those small credit card balances or reduce your debt if you don’t plan to buy until then.

4. Consider an adjustable-rate mortgage (ARM).

If you plan to move in a few years, keep in mind that an ARM loan features a lower initial rate for a set time period.

5. Pick a shorter term.

Lenders typically charge lower rates for shorter terms such as 15 years. If you can afford the higher monthly payment, you’ll save thousands of dollars over the life of the loan compared to a 30-year fixed-rate loan.

6. Pay mortgage points.

A mortgage point is equal to 1% of your loan amount, and paying for points can buy you a lower interest rate.

7. Shop with three to five lenders.

Homeowners that compare loan estimates from at least three to five mortgage lenders often get the lowest mortgage rates.

Summary of the best mortgage lenders of 2023

LenderLendingTree rating and “best of” categoryLender review

Best overall mortgage loan variety		Read our review

Best online mortgage experience		Read our review

Best for refinance loans		Read our review

Best for VA loans		Read our review

Best for FHA loans		Read our review

Best for jumbo loans		Read our review

Best for home equity loans		Read our review

 Learn how we chose our list of the best mortgage lenders

 Are you able to negotiate a better rate for your mortgage?

It’s possible to negotiate a lower interest rate. Use your mortgage offers as leverage and ask each lender about matching your lowest-quoted rate. You should also consider making a larger down payment and paying for mortgage points.

 

Why you should compare mortgage rates

The main reason to compare mortgage rates is to save money. A recent LendingTree study found that homebuyers in the nation’s largest metro areas saved an average of $63,151 over the lifetime of their loans by comparing offers from different lenders.

Lenders periodically offer special pricing for specific loan programs, but you might not learn about those programs if you only contact one or two mortgage lenders.

Which mortgage loan type is best?

15-year fixed-rate vs. 30-year fixed-rate mortgage

A 30-year fixed-rate mortgage is the most popular type of mortgage because of its affordability and stability. Meanwhile, the 15-year fixed-rate mortgage typically comes with a lower interest rate when compared with a 30-year loan. The trade-off with a 15-year term is a significantly higher monthly payment, however, because your repayment term is cut in half.

Bottom line:

  • A 30-year fixed-rate mortgage is the best choice if you want the lowest predictable monthly mortgage payment.
  • A 15-year fixed-rate mortgage is the best option if can afford the higher payment and want to pay your loan off quicker.

5/1 ARM vs. 30-year fixed-rate mortgage

The 5/1 adjustable-rate mortgage (ARM) can be similar to the 30-year fixed-rate mortgage in that it can also have a 30-year repayment term, but there are other terms available. What sets 5/1 ARMs apart is that the interest rate is only fixed for the first five years of the term, and then the rate adjusts annually for the remaining 25 years.

Mortgage rates on 5/1 ARMs are often lower than rates on 30-year fixed loans. When the rate starts adjusting after the fixed period ends, it could go up or down. If your rate increases, you’ll need to be financially prepared to either absorb a higher monthly payment amount or refinance into a fixed-rate mortgage.

Bottom line: 

  • A 5/1 ARM makes sense if you plan to move or refinance before the low-rate initial period ends.
  • A 30-year fixed-rate mortgage is best if you don’t want any fluctuations in your monthly house payment.

10/1 ARM vs. 5/1 ARM

A 10/1 adjustable-rate mortgage has a longer initial fixed-rate period than a 5/1 ARM. You’d enjoy a stable interest rate for the first 10 years and have a fluctuating rate for the remaining 20 years. A 10/1 ARM might work best for you if you plan to sell your home or apply and qualify for a refinance before the fixed-rate period ends.

Bottom line:

  • A 10/1 ARM is worth if you want a lower payment than current 30-year fixed-rate mortgages and prefer a longer time period before the rate adjusts.
  • A 5/1 ARM is typically the best way to go if you want bigger savings than the 10/1 ARM rates allow and plan to move or refinance before the initial low-rate period is over.

    How to get a mortgage loan

    There are four basic steps to getting a mortgage:

    1. Know the different loan programs. Learn the minimum mortgage requirements ahead of time to avoid applying for a program you don’t qualify for. Government loan programs offer extra flexibility versus conventional loans but also come with extra mortgage insurance or guarantee fees.
    2. Fill out a loan application. Lenders use the mortgage application process to vet your entire financial history to determine if you can repay a mortgage. That includes a deep dive into your earnings, employment history, savings and credit history.
    3. Provide financial documents. Everything you disclose on an application has to be verified by documents — pay stubs and W-2s for income, bank statements for savings and a credit report to verify your scores and payment history.
    4. Get a home appraisal. Your loan amount is based on an analysis of your home’s value or price. The home appraisal is completed by a third party to give an unbiased opinion of how much the home is worth.

     

    What are the different types of mortgages?

    There are five main types of mortgages:

    • Conventional loans: Conventional loans often require a minimum 620 credit score and 3% down payment. Borrowers who put down less than 20% must pay for private mortgage insurance.
    • FHA loans: You may qualify for an FHA loan, which is insured by the Federal Housing Administration (FHA), with as low as a 500 credit score and 10% down payment. You’d only need to put 3.5% down if you have a 580 score or higher.
    • VA loans: The U.S. Department of Veterans Affairs (VA) guarantees VA loans to finance homes for military service members, veterans and eligible surviving spouses. Many lenders prefer a 620 credit score and there’s often no down payment required.
    • USDA loans: USDA loans are backed by the U.S. Department of Agriculture (USDA) and cater to homebuyers in designated rural areas. You’re typically not required to make a down payment, but you’ll need to meet income requirements. In many cases, you’ll need a minimum 640 credit score.
    • Non-conforming loans: Also known as “jumbo loans,” non-conforming loans have amounts that exceed conforming loan limits set by Fannie Mae and Freddie Mac. Non-conforming loans usually require a minimum 680 to 700 credit score and 20% down payment.

     

    Frequently asked questions

    A mortgage is a loan from a bank or another lending institution that helps you refinance or buy a home. The lender provides funds on your behalf secured by a lien on your home, and you agree to repay the loan plus interest. If you stop making monthly payments, your lender can repossess your home through the foreclosure process and sell it to recover their money.

    You’ll need to apply for mortgage preapproval to get an estimated loan amount you could qualify for. Lenders use the preapproval process to review your overall financial picture — including your assets, credit history, debt and income — to calculate how much they’d be willing to lend you for a mortgage.

    You can use the loan amount printed on your preapproval letter as a guide for your house hunting journey. But, be careful not to stretch your budget too thin and borrow to the maximum. That’s because your preapproval amount doesn’t factor in recurring bills that aren’t regularly reported to the credit bureaus — including gas, cellphones and other utilities — so you’ll need to retain enough disposable income to comfortably cover these monthly bills, plus your new mortgage payment.

    A discount point — also called a mortgage point — is an upfront fee paid at closing to reduce your mortgage rate. One point is equal to 1% of your loan amount. So if you’re borrowing $300,000 for example, one point would cost you $3,000.

    Each mortgage point can usually lower your rate by 12.5 to 25 basis points, which equals 0.125% to 0.25%. However, to get the exact cost of your mortgage point buydown, check Page 2, Section A of your loan estimate.

    About the author

     

    Denny Ceizyk

    Senior Writer, Mortgages

     

    • Expertise: Mortgage, personal finance, financial literacy, debt management and real estate investing
      • Education: University of Arizona

     

     

    Denny Ceizyk has been a senior writer covering LendingTree’s mortgage content since 2019; he has covered the mortgage industry since 2007. Besides writing home loan articles for LendingTree, Denny contributes expert commentary for national publications including MarketWatch, the New York Post, AARP, Realtor.com and Money magazine.

    Before joining LendingTree, Denny spent 25 years in the mortgage industry advocating for and educating homeowners to help them make the best mortgage decisions. He has worked in the institutional mortgage banking world, having owned and operated a mortgage brokerage company for 18 years.

    Denny earned a bachelor’s degree in media arts from the University of Arizona and has advocated for financial literacy initiatives at both the state and local government level over the past 30 years.